Nortel pensioners rally at Queen's Park on Sept. 15, 2010: - Don't Wind Up our Pension Plans!
September 9, 2010, 12:00 AM EST
Nortel pensioners and supporters will rally at Queen's Park in front of the Legislature to protest the handling of their pension funds by the Government of Ontario, on September 15 at 12 noon.
A large gathering is expected, including CAW leaders and members, the Canadian Labour Congress and the Canadian Federation of Pensioners.
"Nortel pensioners have been first wronged by the company through its utter mismanagement and could now be wronged by the provincial government," said CAW President Ken Lewenza. "All retirees deserve to live in dignity - that means they need an adequate pension to allow them to do so." Lewenza said that the union is urging all CAW members in the area to support the Nortel pensioners rally on September 15.
Below is an excerpt of the open letter sent this week to Premier Dalton McGuinty, on behalf of Nortel retirees.
An Open Letter to Ontario Premier Dalton McGuinty from Nortel's pensioners
Don't Wind Up our Pension Plans!
On September 30, Nortel's pension plans will be placed in the hands of your government.
Twenty thousand former employees across Canada, including a large number who are elderly and in poor health, will be affected by your decisions. We are reminding you that our pension plans represent our retirement savings. It is our money, not the Ontario government's and we intend to have a say in how it is managed. The time for some fresh thinking and action by your government on protection of pensions and pensioners is long overdue.
We discovered in 2009 that our pension plan is seriously under-funded. The latest information from Nortel indicates that we will lose at least 35% of our pensions. This estimate may prove highly optimistic for reasons described below. Given a choice in the matter, we would prefer that the assets in Nortel's estate were the main source for reducing our loss, not the public purse. The actions of the Federal government in favouring foreign claimants over Canadian workers in bankruptcy court make this unlikely, unless there is a sudden change of heart on the part of Federal Minister of Industry, Tony Clement. And now the Ontario government, having already allowed Nortel the opportunity to neglect its funding responsibilities, seems intent on making matters much worse for its retirees.
Over the past year we have purposefully and consistently asked your government NOT to wind up our $2.5 Billion Pension Fund and NOT to attempt to buy us annuities with the proceeds. The negative impact of Wind-up-by-Annuity is recognized in the 2008 report of the Ontario Expert Commission on Pensions when it recommended that your government "investigate strategies for reducing the cost of annuities and the influence of the annuities market". It is clear that Wind-up-by-Annuity will erode even more of our pension incomes. Experienced actuaries and academics tell us that liquidating a very large fund like ours could cause a systemic failure of the Canadian annuity market, which typically can only supply between $200 Million and $500 Million worth of contracts per year. At best winding up our plan will cause a steep rise in annuity prices, which might lead to the purchase of lower quality products. Furthermore, outrageous as it may seem, we will be forced to pay the costs of this destructive process from our pension fund!